Arjuna (Fictional Character): Krishna, as September is the last chance to make compliance under various rules and regulations under the Goods and Service Tax Act so what action should be taken in relation to Inward supply and outward before the filing of GST Return for the month of Sept 2021?

Krishna (Fictional Character): Arjuna, September is an important month for the completion of major compliances under the Goods and Service Tax Act. Following things in respect to Inward supply should be kept in mind by the taxpayer –

Important Care to be taken before filing Sept-21 GST Return

1. Availment of Input Tax Credit for F.Y 2020-21: As per Section 16(4), a registered person shall not be entitled to take ITC in respect of any invoice or debit note for the supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of the financial year to which such invoice or debit note pertains or furnishing of the relevant annual return, whichever is earlier. Therefore, if any ITC in relation to any invoice/debit note pertaining to F.Y 2020-21 has not been claimed by the taxpayer then the same should be claimed in the month of Sept-2021.

2. Reconciliation of ITC appearing in GSTR-2A/ 2B with Inward Register: Input tax credit appearing in GSTR-2A/2B but not booked in purchase register should be identified and reconciled accordingly or in case the input tax credit has been availed in books of accounts but not reflected in GSTR-2A/2B should be reconciled and follow up for the same may be undertaken with the supplier so that it is reflected in GSTR-2A/2B. Also, the taxpayer shall ensure compliance with the limits specified under 36(4) for claiming ITC.

3. Apportionment of ITC as per Rule 42 & 43: In case the taxpayer is engaged in exempt supply and taxable supply, input tax credit availed is required to be reversed in a proportion of exempt supply to total turnover under rules 42 & 43 while filing GSTR-3B. Such reversal shall be calculated finally for the financial year before the due date for furnishing of the return for the month of September following the end of the financial year to which such credit relates. However, if reversal made in GSTR-3B is short/excess then the same shall be reversed/claimed respectively.

4. Reversal of ITC as per Rule 37 (Non Payment of Consideration within 180 days): A registered person, who has availed of an input tax credit on inward supply, but fails to pay to the supplier thereof, the amount of value not paid and the amount of input tax credit availed of proportionate to such amount not paid to the supplier in immediately following the period of 180 days from the date of the issue of the invoice needs to be reversed. Accordingly, the taxpayer should ensure whether the payment in respect of all the purchases made up to 31st March 2021 has been made to the supplier.

Arjuna (Fictional Character): Krishna, what things in relation to Outward supply should be kept in mind before the filing of the Sept 2021 return?

Krishna (Fictional Character): Arjuna, the following actions should be taken by the taxpayer with respect to Outward supply-

1. Reconciliation of Outward Supply as per books of Accounts and GSTR-3B filed for the FY 2020-21: The taxpayer should reconcile the outward supply as per books of accounts and filed GSTR-3B so that any modification/rectification can be done till Sept-2021 i.e. if any sales have been short reported, not reported or excess reported as the case may be then the same shall be reported in the return for the month of Sept-21.

2. Amendment in GSTR-1: If any amendment is to be done in relation to outward supply then such amendment can be done in Sept-21. For e.g. In case any B2B supply has been reported as B2C then the same can be amended in the return of Sept-21.

3. Issuance of Credit Notes: As per Sec 34(2) of the CGST Act, Credit notes pertaining to invoices issued in F.Y.2020-21 cannot be issued after filing the return for the month of Sept-2021. Therefore, any credit note for FY 2020-21 should be issued by the month of Sept 2021.

Arjuna (Fictional Character): Krishna, what should the taxpayer learn from this?

Krishna (Fictional Character): Arjuna, as of now, there is no option for revising a return in the GST Law. But, the GST department has given the taxpayers, sufficient time to rectify their errors & mistakes, of which September is the deadline. Once the return of September 2021 is filed, no changes or rectifications can be made further. So, taxpayers must reconcile their books and returns & make the final adjustments, if any within the time frame to save interest, and save themselves from many other further troubles.

Author Bio

Qualification: CA in Practice
Company: R.B. Sharma and Co
Location: Aurangabad, Maharashtra, India
Member Since: 27 Jan 2018 | Total Posts: 339
1. Vice-Chairmen of WIRC of ICAI for the year 2015-2021. 2. Youngest Chairman of Aurangabad Branch of WIRC of ICAI in 2002. 3. Author of Popular Tax articles series based on Krishna and Arjuna conversation i.e “KARNITI” published in Lokmat on every Monday. Till date 335+ weekly articles ha View Full Profile

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